Marijuana/Cannabis Surety Bonds

What is a Marijuana Surety Bond?

Marijuana Bonds are surety bonds that some businesses are required to post before they can engage in any marijuana related business activities. These business activities include the operation of dispensaries, cultivation facilities, processing facilities, testing laboratories, pharmacies, and the transportation of marijuana or marijuana related products.

Currently, 29 states and the District of Columbia have passed legislation legalizing marijuana in some form. Most states have legalized medical marijuana, while a few states have even legalized the plant for recreational use.

Some states, and even a few cities, have turned to the use of surety bonds in order to help regulate the industry. Bonds guarantee marijuana business license holders follow the rules and regulations set in place for their industry.

Below are the states that require marijuana related businesses to post a surety bond. The ProSure Group is licensed to write bonds in every one of these states:

Colorado - Currently, only a few municipalities require a surety bond.

Nevada - Currently, only the cities of Las Vegas and North Las Vegas require a surety bond.

If you need a marijuana surety bond but don’t see it above, please give us a call on our toll free number, 1-800-480-3883. Legislation is always changing, so we may not have had the chance to update our website yet. Most bonds are required at the state level, but some may be required at the county and/or city level. Regardless if it is listed or not, we can write your bond!

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Due to the risk from the perspective of the bonding company, marijuana bonds are very carefully underwritten and priced accordingly. Part of the cost of the bond will be the time and effort needed to provide the documentation and information the bonding company will need. In all cases, personal credit, personal financials, business financials, and industry experience will be required. Of course, we can typically handle all credit types and financial situations - from excellent to poor - as such those terms vary.

Most marijuana bonds can be written for 1-5% of the bond amount when applicants meet certain underwriting criteria such as excellent credit, excellent personal and business financials, and excellent industry experience.

Additionally, The ProSure Group has been able to secure these bonds without the use of collateral and we have also been able to secure the ability to waive personal indemnity for owners under certain circumstances.

Marijuana/cannabis bonds are in place to ensure marijuana businesses follow the rules and regulations set forth under the agreement of their license. Each bond is different, some guarantee the principal (the marijuana business) will pay sales tax and provide accurate record keeping, others guarantee the company will grow and provide enough product, some guarantee the quality and safety of the product, while others guarantee all of these things and more. Speak with your surety professional to gain a better understanding of the marijuana/cannabis bonds’ protections and how that affects you.

In most cases, the bonds are required to be posted within 7-14 business days of the notice of license approval. If the bond is not posted within the allotted timeframe, then the applicant will lose their license. Because of this, it is very important to get approved for the bond before you get approved for the license.

Most cannabis bonds are required at the state level. Of the 29 states that have legalized marijuana use, 8 of them require a surety bond for marijuana related businesses. A few other states currently have legislation pending. This page will be updated as new requirements are implemented.

There are also a few cities that require cannabis surety bonds separately from the state. Currently, this is the case in California, Colorado, and Nevada.

The government entity (city, state, or county) that is requiring the bond is known as the Obligee.

All cannabis/marijuana surety bonds are different. Some renew on an annual basis and others renew biennially. There are other cannabis/marijuana bonds that are only required to be in force until the principal meets certain obligations. For example, in one state the bond is required until the principal files their first tax return. Other states also allow for the bond amount to be lowered as the principals meet certain benchmarks. Your bond agent should know these requirements. That information is also stated directly on the bond form.

Contact The ProSure Group! As surety bond experts in business in Florida since 1993, The ProSure Group has experience handling many bonds of this type and has partnerships with more than 30 different surety companies.

We can ensure that you will get the best, most competitive pricing and terms available in the marketplace. You just need to complete our simple application or give us a call, and one of our specialists will gladly assist you with your medical marijuana surety bond needs.